Chief Minister Chandrababu Naidu had invited people to invest with the State government for the new capital Amaravati and other developmental works. He proposes to raise bonds to be issued to the people for their investment.
Chandrababu Naidu had earlier invited people to donate bricks for Amaravati and there was huge response for the same. People have contributed money for the bricks to be used in the construction of Amaravati. They were made to purchase the bricks online and there was a huge response from the NRIs first. Three years have gone and no one knows what happened to the money raised in the name of Naa Amaravati – Naa Ituka (My Amaravati – My Brick). All that the State government could build in the three years was the temporary secretariat with five blocks at Velagapudi, which included Assembly and Secretariat.
Three years later, Chandrababu Naidu is asking people to put their deposits with the government. There would be more NRIs, loyal to the ruling party, coming forward to invest. This would go like a festival for a few more months in the State, thus diverting the attention of the people from the core issues to these more emotional issues.
The Chief Minister had promised more interest for the deposits. As it is, the government is paying 8 per cent interest to the banks on the loans it is availing. The Chief Minister proposed another 1 or 2 per cent more to the people if they invested with the government. The State government is yet to come up with a framework to raise the bonds. It was just an announcement from the Chief Minister and the officials, particularly the finance department would have to work out the modalities. It is not clear whether the government would take the investments from the people and issue bonds through the AP Capital Region Development Authority (APCRDA) or would float a new wing for the purpose. The finance department would also have to see whether taking such loans from the people would come under the Financial Regulation and Budget Management (FRMB) Act or not.
Chandrababu Naidu wants his dream city, Amaravati, to be built to ensure that his name remains in the history of the State for building the new capital. The work on housing quarters for the employees is already started and they would be handed over to the employees by December 2018. The work on housing quarters for the Ministers, MLAs and all India service officers would begin in April and the work on Assembly, Secretariat and High Court will start in the next two months.
This would be a herculean task for the State government which is running on external borrowings. The borrowings are more than the budget as the debt crossed Rs 2.25 lakh crore while the budget stands at Rs 1.92 lakh crore. This year, the government is planning to go for another Rs 30,000 crore external borrowings. A greater portion of the borrowings is going towards the Polavaram project construction, while some portion goes towards the publicity and campaign for the State. While Polavaram project is lifeline to the State, one wonders why the State government should spend on it from its debt when the responsibility is on the Central government. Even if the Central government reimburses the expenditure, the State government would have to pay the interest, which runs into a few hundred crore of rupees.
Now, with the idea to mobilise investments from the people, given the financial constraints, the State is set to witness yet another round of high voltage drama, which is not a healthy move in terms of the strength of the State exchequer.